Robert Hiscox, outgoing chairman of insurer Hiscox, gave an elegant "up yours" to corporate governance purists as he named an insider, chief underwriting officer Robert Childs, as his successor.

"If I am to leave my life's work and my family's financial health in the hands of others, I feel safe in the knowledge that the chairman at the head of the table has an incisive knowledge of the risks in our business, and is unlikely to allow foolishness to take place."

Fair enough. Hiscox, after four successful decades in the job, should know what's good for the company that bears the family name. Shareholders won't grumble one jot.

It's the broader application of the principle that's problematic. "A few more insiders at the helms of some other financial institutions in the City might have stopped some of the idiocy that occurred," added Hiscox.

Yes and no. It's not hard to name institutions that failed with outsiders – indeed non financial specialists – in the chairman's seat, such as Royal Bank of Scotland (Sir Tom McKillop) and HBOS (Lord Stevenson). On the other hand, HSBC's shareholders might object that an outsider would not have seconded Sir John Bond's strange decision in 2002 to splash out on a US sub-prime lender called Household. There are few hard and fast rules in this field.